Orbital Engine Corporation Ltd: Case Study

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TABLE OF CONTENTS

1. EXECUTIVE SUMMARY

2. ANALYSIS

1. Two marketing activities which were wise given OEC’s main objective

1. addressing credibility and performance issues, which is one of the primary concerns of car manufacturers

2. improved OCP engines to be readily applicable to current manufacturing practice

2. Reasons OEC failed to have engine adopted by any major car manufacturer

1. failed to understand the real wants of major car manufacturers

2. failed to formulate strategic market segmentation

3. poor competitive strategy execution

4. lack of branding activities

3. Marketing lessons from adoption of OEC’s technology by US marine outboard motors maker

3. CONCLUSION

1.0 EXECUTIVE SUMMARY

In this report we will be evaluating the recital of Orbital Engine Corporation Ltd. pertaining to car manufacture and outboard marines.

Detail analysis has been carried out on marketing decision or activities in relation to OEC’s objective, identify the unsuccessful reasons behind the idea of engine adoption by OEC and explore the successful marketing lessons how OEC’s technology has been adopted by the marine makers outboard motor in the US.

Following the above studies we conclude by providing our recommendations to grow OEC in terms of revenue and market based assets.

Introduction
Orbital Engine Corporation Ltd (OEC) is an Australian engine technology company for automobiles, boats and motorcycles. The technology used is known as Orbital Combustion Process (OCP) whereby it reduce fuel consumption and emission output. Contribution from license and test engine sales generates the most revenue of OEC. In 1992 it contributed $40million to sales revenue but in same year dropped to $11million. By next four years the pre-tax profits drop to an operating loss of $21million.

| |1992 |1996 | |Sales |$ 47 million |$ 30 million | |Profit / (Loss) before tax |$ 33 million |$ (21) million |

Table: summary of sales and profit / (loss) earned by OEC

2. ANALYSIS

2.1 TWO MARKETING ACTIVITIES WHICH WERE WISE GIVEN OEC’S MAIN OBJECTIVE

Since its inception, OEC has been concentrating on lucrative automotive industry. In commercializing its innovative engine technology, OEC had implemented various marketing strategies to convince the big players in the market to adopt their system into car manufacturing.

In the process of strategizing marketing activities, conducting market research and focusing on customers’ wants are very important. Based on the SWOT analysis, it is clear that OEC’s technologies are beyond current market offerings, which is a fantastically strong point. Their future looks bright with increasing demands for fuel efficient and low emission cars. However, credibility concerns and economic costs had proven to be the barrier to acceptance in the automotive industry. OEC would have to concentrate on overcoming these objections in their pursuit to be successful in this category.

SWOT Analysis for Orbital Engine (in relation to the Automotive Industry)

The two wise marketing activities implemented by OEC to achieve their objectives were:

2.1.1 Addressing credibility and performance issues, which are the primary concerns of car manufacturers. The highly concentrated automotive industry places great demand on new engines’ durability and stability before making decision. Understanding the targeted customers, addressing what they really want and concern is of top priority. Before 1995, OEC relied on in-house testing, which obviously did not convince their...
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